LANSING ? A House subcommittee studying anti-trust implications of a deregulated telecommunications industry has sought guidance from Michigan Attorney General Mike Cox, saying it could not recommend any legislation until those issues are addressed.
A report presented Thursday to the Energy and Technology Committee said court rulings and varying interpretations of how state law may be applied leaves several critical questions in limbo.
Regulated monopolies had been exempt from the state’s anti-trust law, which bars private companies from engaging in predatory practices to drive competitors out of business, but federal and state laws are in the process of changing telecommunications to a competitive environment.
“Clearly, the telephone industry has changed from a regulated monopoly to a competitive industry with multiple companies competing for trade,” the report said. “Because of deregulation and a more competitive environment, it is paramount to ensure that companies in the telecommunications industry are subject to the anti-trust requirements.”
The report said traditional telephone companies – principally SBC and Verizon in Michigan – contend they are subject to anti-trust laws for operations which are not subject to government regulation, though in court cases involving competitors they have argued they are pervasively regulated and should be exempt.
The Public Service Commission, whose rules governing telecommunications conduct were thrown out in a September Court of Appeals ruling, had urged the subcommittee chaired by Rep. Ken Bradstreet (R-Gaylord) to seek clarification of the law.
One proposal the subcommittee did recommend was new legislation specifically authorizing the PSC to again implement rules governing telecommunications services.
The report said at the same time, a clarification should be made that the PSC does have authority over anti-competitive behaviors relative to regulated activities, concluding that changes in the anti-trust law are not needed until either the attorney general or a court demonstrates that the law cannot be used to remedy situations that fall outside the jurisdiction of the PSC.
Specifically, Cox was asked whether:
An antitrust exemption exists for an incumbent provider to make an agreement with some competitors but not others, such as SBC’s agreement to waive certain termination penalties for customers of one phone provider but its refusal to do so with TDS Metrocom. (The PSC ruled it lacked jurisdiction over private agreements).
An antitrust exemption exists for incumbents for billing arrangements they have with competitive providers for unregulated services and the provision of those services.
The anti-trust act authorizes a competitor to bring an allegation of predatory pricing by an incumbent provider if the PSC approves SBC’s application to declare voice services for residential and commercial customers in Detroit, Lansing, Grand Rapids, Flint, Ann Arbor, Ypsilanti and Mount Clemens are competitive and not subject to state regulation.
Bradstreet said the report is a starting point to review the anti-trust issues relative to telecommunications but did not ask or expect quick action. “This is an issue that doesn’t die at the end of the year,” he said.
Bradstreet said the report is a starting point to review the anti-trust issues relative to telecommunications but did not ask or expect quick action. “This is an issue that doesn’t die at the end of the year,” he said.
Indeed, Scott Stevenson, president of the Telecommunication Association of Michigan, cautioned against taking any action in the lame-duck session in light of the need to renew the telecommunication law next year and called the report well-intentioned, but flawed. “It explicitly acknowledges that there is no need to amend Michigan’s antitrust law, but contains unrelated proposals that would increase the regulatory burden on an industry vital to Michigan’s economic recovery.?
The PSC on Wednesday set a November 30 deadline to receive comments SBC’s notice that claims a competitive market exists for business and residential local exchange services in most of Michigan. After reviewing reply comments that are due by December 10, the PSC will determine whether to conduct a hearing on the issue (case numbers U-14323 and U-14324).
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